from the reality-smacking-that-myth-around dept

For a few years now, we've been hearing pay TV execs (and some of their favorite Wall Street analysts) claiming that cord cutting in the US is some sort of myth, even as the numbers continue to prove otherwise. The latest stat is that, since the beginning of this year 400,000 households have cut the cord and dropped pay TV services. At what point will the TV guys realize that cord cutting is real? They still like to blame it all on the economy, but the fact is that the vast majority of these users are never going back. Until TV execs realize that's a fact, they're never going to understand how to adapt.

from the at-all dept

Recently we've seen a number of cases, both civil and criminal, brought against websites that involve either links or embeds of videos hosted elsewhere. UK student Richard O'Dwyer is facing extradition and criminal charges for hosting a site that did exactly that. But, as many of us have wondered in the past, how is such a site infringing at all? After all, the videos themselves were uploaded by other people to other sites. The streaming occurs from those other servers. The embed just points people to where the content is, but it does that neutrally, no matter what the content might be.

A few months ago, we wrote about how the MPAA had jumped into a copyright infringement appeal involving porn producer Flava Works against a video "bookmarking" site called MyVidster. The MPAA argued that links and embeds are infringing, in support of a questionable district court ruling against MyVidster.

The appeals court ruling has now come out, written by Judge Posner, and it's absolutely worth reading (embedded below). Posner goes into great detail about how MyVidster's linking and embedding features don't even come close to infringing. They're not infringement and they're not contributory infringement. He goes through a pretty accurate description of how embedding works, and why MyVidster is separate from the uploading/hosting/streaming. But then he notes that those watching the videos aren't even infringing, so there isn't even any infringement for MyVidster to contribute to:

Is myVidster therefore a contributory infringer if a
visitor to its website bookmarks the video and later
someone clicks on the bookmark and views the video?
myVidster is not just adding a frame around the video
screen that the visitor is watching. Like a telephone
exchange connecting two telephones, it is providing a
connection between the server that hosts the video and
the computer of myVidster’s visitor. But as long as the
visitor makes no copy of the copyrighted video that he
is watching, he is not violating the copyright owner’s
exclusive right, conferred by the Copyright Act, “to
reproduce the copyrighted work in copies” and “distribute
copies . . . of the copyrighted work to the public.” 17
U.S.C. §§ 106(1), (3). His bypassing Flava’s pay wall by
viewing the uploaded copy is equivalent to stealing
a copyrighted book from a bookstore and reading it.
That is a bad thing to do (in either case) but it is not
copyright infringement. The infringer is the customer
of Flava who copied Flava’s copyrighted video by uploading
it to the Internet.

Got that? It's actually important. He's saying that those who are watching a video that someone else uploaded are not infringing on the reproduction right under copyright. Only the uploader has potentially violated that right. So there can't be a contributory infringement claim over that right.

Of course, copyright includes a few other rights beyond reproduction. There's also the "public performance" right. After running through a few different theories there, Posner again finds no clear case of infringement.

Flava contends that by providing a connection to
websites that contain illegal copies of its copyrighted
videos, myVidster is encouraging its subscribers to circumvent
Flava’s pay wall, thus reducing Flava’s income.
No doubt. But unless those visitors copy the videos
they are viewing on the infringers’ websites, myVidster
isn’t increasing the amount of infringement.... An employee of Flava who embezzled corporate
funds would be doing the same thing—reducing Flava’s
income—but would not be infringing Flava’s copyrights
by doing so. myVidster displays names and addresses
(that’s what the thumbnails are, in effect) of videos
hosted elsewhere on the Internet that may or may not be
copyrighted. Someone who uses one of those addresses
to bypass Flava’s pay wall and watch a copyrighted
video for free is no more a copyright infringer than if
he had snuck into a movie theater and watched a copyrighted
movie without buying a ticket. The facilitator
of conduct that doesn’t infringe copyright is not a contributory
infringer.

In other words, the person watching the video isn't doing a public performance (though the hosting server may be). But since myVidster is only helping the person watching the video, then it's not violating the public performance right either.

As we noted in our post about the original case, part of the ruling hinged on myVidster losing its DMCA safe harbor protections by not having a repeat infringer policy. But Posner notes that the DMCA safe harbor isn't even in question here because those viewing the videos have not infringed and thus there is no copyright infringement related to myVidster for showing the embeds:

myVidster received
“takedown” notices from Flava designed to activate
the duty of an Internet service provider to ban repeat
infringers from its website, and Flava contends that
myVidster failed to comply with the notices. But
this is irrelevant unless myVidster is contributing to infringement;
a noninfringer doesn’t need a safe harbor.

This ruling makes it clear that watching embedded videos is not infringing and then neither is hosting the embed code. While limited to the 7th Circuit, this ruling could still be quite handy in a number of other cases, including O'Dwyer's and the Rojadirecta case, which also involves embedded videos. Eric Goldman is a bit more skeptical of the impact of the ruling, arguing that Posner reasoning isn't particularly clear (well, he calls it a "train wreck.") While I rarely disagree with Goldman, I'm not convinced that this is such a train wreck. While Posner's explanation is, at times, convoluted, he does clearly make the main point: if there's infringement, it's completely disconnected from the user watching the video and the site doing the embedding.

Either way, Posner vacates the lower courts ruling, and notes that there are a few other issues with the case (mainly having to do with some other aspects of myVidster's business), but the main fight shows no infringement. Oh yeah, and Posner doesn't even reference the MPAA's filing in the case, suggesting how compelling that argument was...